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In
a letter to employees, Starbucks Chief Operating Officer Mike
Grams said the locations targeted either aren't delivering
acceptable financial results or can't provide the kind of
experience that Starbucks wants for customers and employees.
The company didn't say Thursday which coffeehouses will close or
how many are located in the U.S.
Starbucks Workers United, which represents workers at the 700
company-owned U.S. Starbucks stores that have voted to unionize,
said 20 unionized stores are among the 250 that are closing, or
8% of the total. Starbucks stores have been voting to unionize
since late 2021, but the union and the company have yet to reach
a labor agreement.
Grams said Starbucks is continuing to retrofit its North
American coffeehouses to make them cozier and more inviting. The
company expects 1,500 stores will be retrofitted by Sept. 30,
which is the end of Starbucks' fiscal year.
“This progress has given us a clearer view of the performance of
every coffeehouse,” Grams said in his letter. “While most are
benefiting from this overall momentum, some coffeehouses
continue to underperform despite the hard work and commitment of
all of you.”
Grams said Starbucks is still committed to growing its store
count in North America. At the end of June, the company had
18,371 stores in the region.
Starbucks said it will transfer employees to other stores if
possible or provide severance support if it's not able to place
an employee in another location. Starbucks Workers United said
Thursday it's sending a formal request for information to
Starbucks about the planned closures and will engage in
bargaining at every unionized store.
Starbucks has also been cutting its corporate ranks. The company
laid off 900 nonretail employees when it closed stores last
September. In May, Starbucks laid off an additional 300
corporate employees and closed some underused U.S. offices.
The company said it will incur $300 million in restructuring
charges with this round of closures, including $200 million in
cash charges as it exits leases and pays employee separation
benefits and $100 million in non-cash charges due to the
disposal and impairment of coffeehouse assets.
Starbucks shares fell less than 1% Thursday in afternoon
trading.
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